Aug. 11 2010 10:26 AM

A defense sub-contractor abandons unstable chemicals in Sorrento Valley

The EPA did not invite us to witness how they dispose of hazardous materials. Instead, we present this artistic rendering.
Photo illustration by Adam Vieyra

During the past two weeks, the U.S. Environmental Protection Agency has been quietly recording the inventory at an abandoned, unlicensed laboratory in Sorrento Valley. The lab contains more than 2,500 chemicals, many unlabeled.

On the morning of Aug. 7, the silence was broken briefly by a detonation.

The San Diego Police Department and San Diego Fire- Rescue Department blocked off the area where the lab is located and assisted the EPA in transporting 12 bottles of "reactive" or unstable chemicals that could explode if shaken or exposed to heat. The teams built a makeshift bunker of sandbags at the end of a secluded industrial park road, then blew up the containers.

"The reason we're getting rid of them is that we don't feel they're safe to put them on the highways of the United States to ship them to another state to burn them," the EPA's on-scene coordinator told CityBeat the day before the controlled explosion. "It's pretty much standard to do this."

What's irregular is the reason: The Sorrento Valley facility wasn't an illegal meth lab or an irresponsible paint manufacturer. The laboratory belonged to Aries Associates, a subcontractor that worked for and leased space to L-3 Communications, a corporation that, according to, wins approximately $35 billion in federal aerospace and defense contracts each year.

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The 24,000-square-foot laboratory is spread across three suites in the La Jolla Sorrento Industrial Park. Proprietors of the offices next door told CityBeat they rarely saw the laboratory workers, except when they dumped dozens of gallons water into the gutters. Neighbors were unaware of what the company actually did behind its always-locked doors and mirrored windows.

Between 2006 and 2008, L-3 researchers worked with Aries scientist Dr. Michael Conrad to develop methods of decontaminating areas damaged by a chemical- or biological-weapon attack. The projects were part of two contracts commissioned by the U.S. Army's Research, Development and Engineering Command and the Department of Defense's Defense Advanced Research Projects Agency.

Since January 2009, however, Aries and L-3 have been engaged in a bitter lawsuit related to intellectual-property rights and contractual obligations. In March 2010, Aries filed for bankruptcy, acknowledging in its paperwork that the facility held chemicals and biological agents that posed a "threat of imminent and identifiable harm to public health or safety."

Aries filed a notice at the end of April that it was abandoning the facility. Within a week, San Diego County Department of Environmental Health (DEH) inspectors and the fire department's hazmat team made their first visit to the site.

"We went out as a matter of routine after we were informed the company had gone out of business," county spokesperson Mike Workman says. "We go out to make sure they have removed all hazardous materials. Obviously, they had not."

DEH also determined that operators did not have a hazardous-materials permit and had not filed the required application to run a research laboratory.

The county requested assistance from the state of California, but the cleanup was beyond the state's capability. On July 29, the EPA took over and declared the laboratory a "Superfund Removal Site," which is a classification for a site that will take less than $2 million and less than a year to clean up. The EPA's on-scene coordinator, Robert Wise, says the chemical-disposal operation could cost upwards of $150,000 and that the EPA will attempt to bill the parties involved.

The relationship between the parties and the defense project is "hotly contested," in the words of one federal judge. In the summer of 2006, L-3 won contracts to develop a mobile air-purification system and a decontamination system that would be effective against chemical- and biological-weapons agents under extreme weather conditions. Dr. Conrad, a physical chemist with more than 30 years of experience and a long list of patent credits, joined the project as an independent contractor, working through his newly formed company, Aries Associates. In court filings, L-3 says it paid Aries $1 million.

Neither Conrad nor his lawyers responded to interview requests.

L-3 "subleased a portion of the lab from August 2006 to October 2008 for projects relating to a government contract," L-3 spokesperson Jennifer Barton writes in an e-mail to CityBeat. "Beyond that, the company does not comment on active legal matters."

During those years, Conrad led a team that developed a number of formulas for the decontamination system. The initial submission was rejected by the Department of Defense for being toxic. A second attempt was rejected for being too flammable. The final product, completed in July 2008, was named BIT-500 by L-3 and AeROS-501 by Aries.

Civil-court affidavits and bankruptcy-court filings paint a vivid portrait of a defense contract gone awry. Conrad's version of the story details how L-3 procrastinated when it came to defining intellectual-property rights. He alleges that a change in leadership in the L-3 division responsible for the project resulted in management claiming ownership of his work, much of which he claims to have developed before teaming up with L-3. Simultaneously, L-3 claims that the decontamination formula was completed as part of its contract and is therefore its property.

"Essentially, what is occurring here is a classic tale of ‘he said / she said,'" U.S. District Court Judge Philip Gutierrez writes in an April 3, 2009, order summarizing the case.

Gutierrez examined the laboratory notebooks kept by Conrad and the L-3 scientist and determined that both sides were credible but that Conrad's might be "more credible." For example, the lead L-3 researcher's notes were often incomplete, whereas Conrad signed and dated every page of his journal. The judge further noted that L-3's promotional material and presentations were full of contradictions when it came to who invented BIT-500 / AeROS and other products.

"In the end, the Court is left with two very different tales," the judge writes. "L-3 pitches a story wherein a young man with only three years of chemical engineering experience succeeded in what both parties concede is an incredibly difficult project: developing a complex chemical and biological weapons decontamination system capable of functioning in extreme temperatures. Aries, on the other hand, tells a tale where a physical chemist with over thirty years of experience…."

L-3 claims that Aries filed a bankruptcy petition in order to stall the evidentiary proceedings. However, a U.S. Bankruptcy Court in July ruled that the case could continue.

As eager as the parties are to take credit for the invention, neither seem particularly eager to take responsibility for the chemicals used in the process. It will take the EPA at least another week to inventory the chemicals on site, then they will package them for disposal and then attempt to recover the costs.

Wise says this could result in a lien on the property, which is owned by Rexford Industrial, an Los Angeles-based real-estate investment firm.

A manager at Rexford Industrial, who asked not to be quoted directly, denied that it will result in a lien. He said Rexford's position is that the chemicals belonged to L-3, since it was the sub-tenant at the laboratory. Although Aries held the $1.5-million, five-year lease with Rexford, he describes L-3 as the "bad actor" in the dispute.

"We didn't feel like paying the money to get rid of it because it wasn't our responsibility," the manager says.

Wise says L-3 has been "really cooperative" in making its technicians available, but it is still unclear whether L-3 is culpable.

"Well, it's going to be the landowner and Aries, for sure," Wise says. "L-3 is still up in the air. We're not sure about them yet. Our attorneys are working on that." 

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